Record Gasoline Prices?
A recent article on gasoline prices included a surprising historical graph (you'll have to scroll down a bit to find it.) Gasoline prices have gone up dramatically this year, in line with higher crude oil prices and the replacement of MTBE by ethanol in several states. Here in Connecticut I pay over $2.00/gallon for self-service. Recently I've been thinking I have never paid more, other than on trips to Europe or Asia, but the graph showed I was wrong.
As low as inflation has been for the last few years, it's easy to forget how big the difference can be between nominal prices--prices in today's dollars--and real prices, adjusted for inflation. Nominal gasoline prices after the first oil crisis in 1973-74 averaged $.53/gallon for leaded regular, while those after the Iranian Revolution rose to $1.25/gallon for unleaded. When you adjust for inflation and bring them into 2003 dollars, these figures translate to $1.69/gal and $2.49, respectively.
This is not to say that gasoline isn't unusually expensive at the moment, but even for someone who follows these issues regularly and traded energy commodities for more than 10 years, it's instructive to see that we're still well short of the real record. And if the times we live in are less turbulent than the oil crisis years of the 1970s, it's not by much.